Trinidad and Tobago Country Risk Report

About This Report

Abstract:

The economy has become increasingly dependent on the energy sector, which now accounts for half of government revenues. This dependence renders the economy highly vulnerable to the ongoing downturn in global oil prices, and falling demand from one of its major export markets, the US. opportunities Progress on structural efforts to support the growth of the private sec- tor � including labour reform, renewed privatisation efforts, improved service provision, a strengthening of the non-banking financial sector and additional support for small and medium-sized enterprises in the non-energy sector � would improve long-term growth prospects. ...The economy has become increasingly dependent on the energy sector, which now accounts for half of government revenues. This dependence renders the economy highly vulnerable to the ongoing downturn in global oil prices, and falling demand from one of its major export markets, the US. opportunities Progress on structural efforts to support the growth of the private sec- tor � including labour reform, renewed privatisation efforts, improved service provision, a strengthening of the non-banking financial sector and additional support for small and medium-sized enterprises in the non-energy sector � would improve long-term growth prospects. Threats as an open, small economy with no controls on profit remittance or capital repatriation, T&T can run the risk of strong fluctuations in capital outflows. ...we expect lower energy prices to weigh on economic growth over the coming years, stymieing the country s nascent economic recovery from the ---- global financial crisis. Chapter -: economic outlook s-T economic Trend regional rank global rank

...Regional ave --.- / Global ave --.- / Emerging Markets ave --.- domestic Politics election Will not resolve challenging security environment bMi VieW Trinidad and Tobago s upcoming general elections will likely see the op- position People s National Movement (PNM) party come to power, as ris- ing corruption and security concerns weigh on the government s popular- ity. However, even under a PNM government, security will remain a key challenge for T&T, tempering investor sentiment toward the country. ...According to a March poll by Trinidadian firm Solution by Simulation (SBS), the PNM is currently leading the People s Partnership (PP) in voting ex- pectations (see chart above). Moreover, while there are a large number of undecided voters at this stage, we believe that a recent deterioration in the security environment and a spate of recent corruption allegations against the government will see many of the undecided voters swing toward the PNM. According to a February SBS poll, crime and corruption are the two most significant issues of concern amongst voters (see chart above). However, the current administration has been accused of a number of corruption scandals since it was inaugurated in ----. Most recently, Prime Minister Persad-Bissessar was forced to reshuffle her cabinet in February after the resignations

...Coupled with a relatively elevated homicide rate and widespread impunity for criminal activity (with eight out of -- murders left unsolved), this will continue to temper popular support for the government. ...security risks set To Persist While opposition leader Keith Rowley has promised to tackle security and corruption, we believe these will remain persistent challenges for T&T following the election. The Caribbean has emerged as a hub for drug traffickers looking to move cocaine from producing countries in South America to consumer markets in the US and Europe in recent years, and T&T s geographical proximity to illicit drug trafficking markets makes the country highly susceptible to this threat (see Rising Drug Trafficking A Threat To Security Outlook , November -- ----). Despite promises to address the challenging security environment, neither the government nor opposition has put forward a com- prehensive plan. ...

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